Finding stocks to buy and hold for the next decade isn’t an easy task. In order to do this, you must anticipate shifting market trends and identify which businesses will still be relevant a decade from now.
One area that is seeing tremendous growth right now that will continue to produce strong cash flows a decade into the future is cloud computing. Cloud computing involves a company building out excess computing capacity, then renting that out to clients. While there are several use cases for cloud computing, none have proven bigger than artificial intelligence (AI). AI is driving major growth in this industry, causing several cloud companies to make huge investments to meet demand.
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Once that computing capacity is contracted, it’s unlikely to drop unless the client folds. With several major AI companies established and starting to become viable, all of the massive build-outs underway for AI seem to make a lot of sense. This makes cloud companies some of the biggest long-term beneficiaries of the AI build-out, and I think looking at this industry makes a ton of sense for long-term investing.
The three major players in this field are Alphabet(NASDAQ: GOOG)(NASDAQ: GOOGL), Amazon(NASDAQ: AMZN), and Microsoft(NASDAQ: MSFT). All three of these stocks are excellent options to buy now and hold for the next decade, especially if their cloud computing growth can keep up.
Each company is seeing explosive cloud computing growth
All three of these big tech companies have other business units outside of cloud, but cloud is the fastest-growing segment for each one.
Amazon Web Services (AWS) saw 28% year-over-year growth during the first quarter — its best mark in nearly four years. Additionally, AWS has developed some custom AI chips that are boosting its growth rate, with this subsection growing at a triple-digit year-over-year pace. AWS actually makes up the majority of Amazon’s operating profits, showcasing how important the business unit is to the overall company.
The next fastest grower is Microsoft Azure. Azure grew at a 40% year-over-year pace in Q3 of fiscal year 2026 (ending March 31). Of the three, Azure is a bit of a silent success story, as Microsoft doesn’t break out individual business units as deeply as Alphabet or Amazon does. However, with a growth rate like that, it’s hard to complain about its success.
Alphabet’s Google Cloud segment was the fastest-growing by far of the bunch. In Q1, its revenue skyrocketed 63% year over year. However, that comes with an asterisk. Alphabet is starting to sell its in-house-designed custom AI chips, known as Tensor Processing Units (TPUs), to a select few clients. That is opening up a new growth lever for Google Cloud, causing its business to soar. This is great for Google Cloud in the short term, but it isn’t a long-term recurring revenue sale like its core cloud computing business.
Still, Google Cloud has kept pace among these three for a long time, so it wouldn’t surprise me to see its core cloud computing business top the scales as the fastest-growing.
All three of these cloud segments are doing fantastically and pushing the parent companies’ core businesses higher. But are they solid buys right now?
Capital expenditures are skewing valuation metrics
Each of these businesses is spending heavily on capital expenditures to meet demand in the cloud segment. This can skew multiple earnings metrics, so I think valuing the companies on operating cash flow is the fairest measure.
Alphabet is clearly the most expensive from this standpoint, while the other two are pretty reasonably priced. Consider that Alphabet is the fastest-growing of this trio and has a thriving generative AI model; this premium shouldn’t come as a surprise to investors.
I think all three of these stocks are great to buy and hold for the next decade, but Amazon and Microsoft are of particular value right now.
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Keithen Drury has positions in Alphabet, Amazon, and Microsoft. The Motley Fool has positions in and recommends Alphabet, Amazon, and Microsoft. The Motley Fool has a disclosure policy.
